Forex and Cryptocurrency Trading

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Why Online Trading is in Vogue?

The modern Forex Trade took its first step in 1971. Before that there were government restrictions in foreign exchange transactions. The restrictions were imposed on Forex Trading due to the Bretton Woods system.

After 1971 the ban on foreign exchange transactions was withdrawn & this came as a boon to Forex Market. Today more and more investors are taking interest in Forex because not much money is required to enter this market.

Its high liquidity, transparent operations, lower expense, no time limits, accessibility to information at any time, forecasting of market trends are some of the reasons. Forex traders assist the investors in this market.

Trading Guide of the Week:

The Most Effective Ways to Use Support And Resistance Levels

One of the most important elements in performing proper technical analysis lies in grasping and truly understanding how to apply support and resistance to your trading strategy.

There’s a virtually endless number of ways to determine probable support and resistance levels, and an equally overwhelming number of ways to incorporate them into your own Forex trading strategy.

Here are three effective yet simple ways to properly integrate support and resistance into your trading.

Determine Risk Management and Stop Placement

Sure, risk management and stop placement are two of the least exciting things about Forex, but they’re vital to being a successful trader.

While stop loss orders allow traders to avoid having their entire account blown up with a few bad trade ideas, support and resistance also enables traders to define the amount of risk they’re willing to take on for any individual trading position.

Let’s say you want to use support and resistance to help you set a proper stop loss upon finding a good trade idea in the middle of a range. If you want to place a buy order, then simply set your stop loss order below the largest, most recent support level within the range. If the stop loss is violated, the order is closed and you’re prevented from accumulating additional losses.

Aside from trading ranges, support and resistance levels acting as a means for stop loss and risk management can also be applied to reversal plays. For example, if you’re waiting to place a buy order for a bullish reversal, look to the most recent low that occurred before price began to reverse. Simply place your stop loss order right below that low. Doing this prevents traders from raking on more losses in the event the reversal does not follow through.